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Stock Trading Blog | Hawk's Scan Sentry Report | Jan Arps Trading

  • To Trend, or Not To Trend...

    Hawk’s Scan Sentry Report January 28, 2013

    Welcome back to “Hawk’s Scan Sentry Report”. I recently found myself chuckling as many pundits, some with expensive subscriptions, are finally coming around to re-confirming the bullish trend that has been rallying since early December 2012. “Really”, I think to myself, “you are just now confirming this?”. Identifying a trend is one of the most important parts of trading successfully, and the earlier you can identify a trend the longer you can trade with it instead of against it. In case any of those writers are reading this, I’ll share a secret little trend identifier with you.  On almost every chart that I demonstrate you will find mention of the Triple Trender. The Triple Trender is a good way of looking at the orientation of the trend from a micro, a medium, and a macro perspective at the same time.  It is based on the award-winning Arps Trender which is a volatility based calculation designed to plot a stair-step line that will stay just far enough away from the likely closes (or highs/lows if you prefer) of the price bars to enable you to ride the trend as far as it can carry you. When the close finally crosses the Trender it will "flip" to the other side of the price identifying the trend in the opposite direction. The Trender has a sensitivity setting which allows you to adjust how much the price must move against the existing trend before the trend is redefined in the opposite direction. This makes the Trender a premium stop loss indicator which can be conformed to varying risk tolerances; but it also serves well to identify the Trend orientation from near-term to longer-term perspectives. Unlike moving average proximities or other trend identifying methods, the Trender is not lagging by a lookback length, so it makes it easier to get into trending trades much earlier.

    (an ETF with the Arps Trender set at sensitivity 3.5)

    Furthermore, if you run the Trender three times simultaneously using three different sensitivity settings you can then identify the Long-term trend, the Medium-term trend, and the Short-term Trend with one quick glance. This is the concept behind the Triple Trender which you can see on the chart displayed below.

    (same ETF with the Triple Trender applied)

    When trend trading, you may want to look for the first opportunity when all three Trenders are on the same side of the price before entering a trade. At best, you then look for a pullback into the short-term Trender to get a better entry price. This initial pullback happens about 50% of the time. Depending on your objectives and risk tolerance you can then use the long term Trender to keep you in the trade until you get a trend exhaustion signal, or you can exit at the first break of the short-term Trender for a quick profit.  We can discuss trend exhaustion signals at another time.

    Let’s take a look at charts for some of the American index futures to see the current state of some of these markets.

    Index Futures:

    S&P  Futures

    (Everything is bullish about this chart, so beware. Even the Radar1 Fear/Greed indicator is greater than it was at the previous high in September  which means that we can’t get a bearish pivot divergence in that indicator until after the price eventually pulls back and then retests it’s highest high. If the Radar2 Price Leader rolls over a little bit more we will see a bearish divergence in that oscillator which could signal a pullback.  Therefore the best trade in this market is to wait for a pullback into the Triple Trender before entering long.  )

    NASDAQ Futures

    (This chart is oddly out of sync with the rest of the American markets. While the other indexes are rallying, this is moving sideways. The trend is bullish as identified by the Radar3 Trend Strength and Triple Trender indicators; but if the Radar1 Fear/Greed rolls over we will be looking at a significant bearish ‘Pivot Divergence’ from the December highs.)

    A couple of weeks a go I pointed out a nice long trade that was setting up in the USDCAD, as well as one in Crude Oil futures contract which are both up now nicely. Last week I also called the downward move in gold and am still looking to ride that short on down to support as described in the chart below. This week has some exciting trades setting up as well which I will describe in the subsequent charts. On the examples below I explain my analysis for some of the most commonly traded symbols using some of the most highly regarded technical indicators available. These tools are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    Other Charts and Analysis

    Equities Setups:

    (Buy) MWV- MeadWestvaco Corp.

    (A Here is a pullback 23 buying opportunity accompanied by a bullish ‘Pullback Divergence’ in both Radar1Fear/Greed  and Radar2 Price Leader. This move occurs as the NewYear’s gap is filled. We will, of course, meet resistance at $33.24, but I think that this could continue beyond that.  )

    Commodities:

    GOLD

    (Last week we anticipated the bearish Pullback 23 signal which has already netted 1.7%.  All of our trend indicators are still bearish so we are very likely to see a continuation down to at least $1637.80 where I expect to find major support. )

    CRUDE OIL

    (Last week I pointed out the Bull Flag breakout which has a target at $100.16. On Tuesday we got a Trend Exhaustion 3 signal which gave us a warning that this rally may be stalling out. Given the bearish divergence in the Radar2 Price Leader, I would not be surprised to see a pullback into the short-term Trender this week. )

    Forex:

    EURAUD

    (Here I anticipate a move upward in the near term as far as resistance at 1.30295 and eventually higher. Radar3 Trend Strength and Triple Trender both identify a bullish trend and we just got a Pullback 23 buy opportunity. The price just broke above the down trendline with increasing buying identified in the Radar1 Fear/Greed. The recent ‘Pullback Divergence’ in Radar2 also supports a bullish inclination for this currency pair.  )

    May the trend be with you,

    Hawk

    www.janarps.com

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Lead, Follow, or Get Out of the Way!

    Hawk’s Scan Sentry Report January 21, 2013

    This past week as I watched the S&P, and the Dow indexes make new 52 week highs,  following the Russel's breakout to new highs earlier in the year, I caught myself wondering what was going on with the NASDAQ?  Why is it being such a laggard?  I am a short term trader, but I decided to take a longer term perspective. Taking a look at the weekly charts I can see a completely different story. The futures markets I trade are not as correlated as they appear to be on a day to day basis. In historical terms it is really the S&P which is lagging behind the NASDAQ. When we look at the recovery of the American indexes relative to their highs of 2007, just before the financial meltdown, we can see that the NASDAQ index tested that high in May of 2011 and then flew past it in February of 2012. In fact, $COMPX has already bounced off of those levels twice as support since that time. The Russel also tested its 2007 highs in May of 2011, but did not see a confirmed breakout of that level until the beginning of this year. The Dow index $INDU has still not tested those levels, although the Dow futures contract did make a test last September and is currently making unconfirmed higher highs now. A little behind, the S&P index and futures contract are still 5% away from those 2007 highs even though they are making new 52 week highs now. From this perspective I still see the NASDAQ as the leader of the US equities. So, I will watch to see if it continues to lead these markets up; or if it begins the next leg to the downside.

    Index Futures:

    NASDAQ Index

    (Well above the 2007 highs, but weak trend strength in Radar3 and weak buying in Radar1.)

    Russel Index

    (Bullish trend strength in Radar 3 and increasing buying in Radar1 as it breaks to new highs.)

    S&P  Index

    (This market shows bullish indications in the Triple Trender and Radars 1 and 3.  Still has a way to go to test the 2007 highs.  )

    Dow Index

    (Weak trend strength in Radar3 and weak buying in Radar1. Just now testing September 2012 highs, still behind the 2007 highs.)

    I want to share with you how I am looking at several of my favorite markets this week. On the examples below I explain my analysis for some of the most commonly traded symbols using some of the most highly regarded technical indicators available. These tools are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    Other Charts and Analysis

    Equities Setups:

    (Buy) GE- General Electric

    (A significant breakout of the down trendline @$21.13  and a resistance line @ $21.93 following a bullish Pullback Divergence. Triple Trender is bullish. Radar1 Fear/Greed shows enthusiastic buying. Note that Radar3 Trend Strength has remained blue throughout this consolidation. These downward pointing blue histogram  lines represent  bullish strength in the midst of a downtrend. )

    Commodities:

    GOLD

    (I am bearish on this market for this week. Note the bearish Pullback Divergence in the Radar2 Price Leader, and the bearish Overbought Trend Exhaustion 1 signal. If this closes significantly above the down trendline I will change my perspective, otherwise I’m viewing this little rally in gold as a pullback in a downtrend.  )

    CRUDE OIL

    (A nice example of a Bull Flag breakout as anticipated in last week’s posting. All of the Radars and Trenders are bullish too.  Note the this would still have to get through resistance at $97.94 before achieving the target projected at $100.16 .)

    Forex:

    USDCHF

    (I see this as a bullish opportunity. Note the Triple Trender has synchronized bullish and the Radar3 Trend Strength is strongly bullish. Also note how the Radar1 Fear/Greed is showing stronger buying than the previous indicator peak. Couple this with a down trendline breakout and a recent bullish Pullback 23. Since this would be an early trend reversal I would anticipate a pullback into the short term Trender before continuing to the upside. )

    May the trend be with you,

    Hawk

    www.janarps.com

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Testing New Highs: What's Next?

    Hawk’s Scan Sentry Report January 14, 2013

    You may have read in posts past how I often compare the S&P index to the NASDAQ to try and see which market is leading which. Another good candidate for this exercise is the Russel small cap index. When the Russel leads the S&P upward this is often perceived as a ‘risk on’ market environment. As we all know, the small cap stocks represented in the Russel index are much more volatile than the S&P 500. So, when we see money flowing into this smaller cap futures contract it helps to lend credence to a rally in the S&P when the S&P itself does appear to have the breath of bullish sentiment to support it. This is the case which we see today. Let us take a look at the charts below.

    Although the S&P is rising, I don’t see the buying confirmed by significant readings in the Radar1 Fear/Greed indicator. As predicted last week, the ES futures contract has now tested the September highs and run some stops; but it has neither retreated nor advanced since that probe into loftier ranges.  If the market has a ‘risk-on’ attitude we would expect to see the riskier Russel contract lead the S&P warhorse to the new highs.  When I look at the Russel futures chart today I see considerable more advancement to higher highs than in the ES contract. This indicates a 'risk-on' sentiment in these American markets. However, our indicators on the Russel chart show a Bearish Pivot Divergence coinciding with an overbought Trend Exhaustion 1 indication. From this I would expect to see this market slide back to retest the breakout price (Support) around 858.  Whether this price level holds up as support for the Russel contract may serve as a good harbinger for what is to come in the S&P futures market.

    Index Futures:

    S&P Index

    (Here we see price resting just above the support level created last September. Trend Exhaustion 1 shows a recent overbought signal which is bearish. However, Radar 1 Fear/Greed has just turned bullish, albeit not significantly yet. Combine this with a bullish Triple Trender and a bullish Radar3 Trend Strength and the path of least resistance here is up. )

    Russel Index

    (This market started the new year making new 12 month highs, well ahead of the S&P. Notice how this market just accomplished it’s Bull Flag target and still shows a relatively strong Fear/Greed reading. However, from the bearish Pivot divergence and the Overbought Trend Exhaustion1 signal I would expect an imminent decline to retest support @ 858. )

    I want to share with you how I am looking at several other of my favorite markets this week. On the examples below I explain my analysis for some of the most commonly traded symbols using some of the most highly regarded technical indicators available. These tools are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    Other Charts and Analysis

    Equities Setups:

    (Sell Short)OKE- Oneok Inc.

    (Notice the combination of bearish Pullback 23 and Trend Exhaustion1 signals. As is often the case, this identifies a bearish pullback divergence with the Radar2 Price Leader. )

    Commodities:

    GOLD

    (This market has more downside than upside as indicated by the Triple Trender, Radar 3 Trend Strength, and Radar1 Fear/Greed. However, $1642 will act as significant support. I expect to see this market trade in a range between $1680 and $1640. I will be looking for intra-day trading opportunities to fade those price levels. )

    CRUDE OIL

    (A  Bull Flag setting up which will be confirmed with a close above $93.87.  Radar3 Trend Strength and Triple Trender are both bullish as is Radar1 Fear/Greed. However, we are trading at the upper end of a recent congestion zone which should prove to be significant resistance.)

    Forex:

    GBPUSD

    (Since the Triple Trender and Radar3 Trend Strength both synchronized  bearish we now have a pullback into the shorter term Trender giving us a short entry opportunity. If the Radar1 Fear/Greed turns green and indicates more bullishness, this short trade will be disqualified.  )

    May the trend be with you,

    Hawk

    www.janarps.com

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Analysis: The Plan and the Markets

    Hawk’s Scan Sentry Report January 7, 2013

    Welcome to a new year and lots of new trading opportunities, I look forward to sharing the  journey with you. This year I am more excited than ever about the possibilities that lie in wait within the markets. In preparation for the new year I have been setting my goals (daily, weekly, and monthly) , reviewing my trading rules, going over my trading log, and committing myself to improving my physical habits as well as my trading habits. All of these are important parts of a successful trading plan.   For most of us, trading is a solo business. That is why it is so important to have clear rules in your trading plan, and to develop the discipline to follow them. The rules in your trading plan are there to protect your account and to help you execute your business. I once heard a successful trader state that he considers the parameters of his trading plan to be his ‘employees’; and you must allow them to do their job in order for the business to run profitably. I find a lot of truth in that.

    And now for a little bit of market analysis… As many of you may know, I like to compare the S&P futures contract to that of the NASDAQ. At this point we see a lot of the same technical indications on both charts, with one big difference. Both have risen close to 10% since the November 16 lows; however,  the S&P is already testing the mid-September highs whereas the NASDAQ is still 5% away from that threshold. This is because the NASDAQ fell quite a bit further than the S&P in the autumn 2012 correction. As I look at the current technical analysis, I don’t see the buyers stepping up in either market with enough conviction to spark a significant rally at this point. I use the Radar1 Fear/Greed indicator, which is still red and pointing down in both of these markets, to draw this conclusion. As a consequence I expect  the S&P to be rejected at this test of 1461 and to trade downward until we see a bit more parity between that contract and the NASDAQ. As I have noted earlier, at some point this year I expect the S&P to be making significant new highs, but this week I don’t expect to see much more than perhaps a bit of “stop running” above the previous highs.

    Index Futures:

    S&P Index

    (Here we see the price testing September 14th highs. Although the Trenders and Radar3 Trend Strength are bullish, note that the Radar1 Fear/Greed indicator does not show buying strength, and Radar2 Price Leader is overbought.)

    NASDAQ Index

    (Although the technical indicators are about the same as the chart above, this market has more upside potential than the S&P. Nonetheless, there are still several levels of resistance to get through before this contract can test the September highs. Note the bearish pivot divergence in Radar1 Fear/Greed. )

    As we enter into this new year, I want to show you how I am looking at several of my favorite markets. On the examples below I explain my analysis for some of the most commonly traded symbols using some of the most highly regarded technical indicators available. These tools are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    Other Charts and Analysis

    Equities Setups:

    (Buy) IRM- Iron Mountain Inc.

    (Notice the strengthening Radar1 Fear/Greed after the bullish pivot divergence. Also note that Radar3 Trend Strength is beginning to show trend strength.  However, the Radar2 Price Leader is currently overbought; I would look for a pullback into the Triple Trender before entering long.  )

    Commodities:

    GOLD

    (Our Triple Trender and Radar3 Trend Strength indicator are both bearish, and the Radar2 Price Leader shows a bearish pullback divergence. This indicates the bears control this market right now. However, if the Radar1 Fear/Greed indicator starts to turn more bullish at this point we would see a bullish pivot divergence which could enable this market to potentially trade through resistance at $1681 and test the next resistance level around $1707.)

    CRUDE OIL

    (This is a market which is showing bullish indications. The Triple Trender, the Radar3 Trend Strength indicator and Radar1 Fear/Greed indicator are all bullish. Note the new highs in Radar1. However, we have an overbought Radar2 Price Leader and we are coming up against a resistance level created by the highs of the October consolidation around  $94.43 )

    Forex:

    GBPUSD

    (After testing the mid September highs of 1.6300 in the middle of December, and again a few days ago, this market shows bearish pivot divergences in the Radar1 Fear/Greed  and Radar2 Price Leader. Furthermore, the Triple Trender is bearish. All we need for downside confirmation is for the Radar3 Trend Strength indicator to turn pink… the color of a bearish trend. )

    May the trend be with you,

    Hawk

    www.janarps.com

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Seasonal Greetings

    From all of us at Jan Arps' Traders' Toolbox to YOU, "May your days be merry and bright; and the may the new year bring you prosperity and keep you in good health."

    Thank you for being an important part of our twenty years of service.

    May the trend be with you,

    Hawk

  • Thank You

    Hawk’s Scan Sentry Report December 17

    This week in the S&P index we see that the Radar3 Trend Strength Indicator just crossed above the zero line which confirms the Triple Trender bullish indication. We also see strong buying indicated by the Radar1 Fear/Greed indicator. However, in the NASDAQ index this is not the case. The composite NASDAQ still shows a weak bearish trend in the Radar3 Trend Strength indicator as well as a recent bearish divergence in the Radar1 Fear/Greed indicator. Both of these markets show deceleration in the Radar2 Price Leader. In as much as these two markets are relatively correlated, and since the NASDAQ index seems to have been leading the S&P index for the last six months (see previous post “Follow the Leader" 11/18/2012) I consequently have a short-term bearish bias in both of these markets. Eventually, some time in 2013, I expect to see the S&P making new highs, but until the United States federal budget gets worked out I have little hope of seeing that rally manifest.

    S&P Index

    NASDAQ Index

    I want to take this opportunity here at the end of this season to say ‘Thank You” to you. I hope that you have found some value in the efforts that we have been putting out to help with the technical analysis of these markets this year. I truly appreciate the feedback and comments that many of you have offered regarding this blog. It has been about a month since we changed the format of these postings, and the response we’ve gotten has been overwhelmingly positive. However, we are always looking for ways to be more helpful. If your voice has not yet been heard, please feel free to drop us a line in the “Comment” section at the end of the post, or email us at info@janarps.com.  In the mean time we’ll keep following these markets and telling you what we are seeing in the technical analysis.

    As we draw near the close of this year, I want to continue to show you how I am looking at a few of my favorite charts. On the examples below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    NASDAQ

    (Here we see a bearish Pullback 23 coinciding with a bearish trendline breakout signal. At the same time we see a bearish Pivot Divergence in Radar1 Fear/Greed. I’m looking for a downward move in this contract this week.)

    Equities Setups:

    (Sell Short) CVX- Chevron Corp.

    (A bearish Trend Exhaustion 1 and Pullback 23 create a Pullback Divergence. This Trend Exhaustion-123 signal is occurring at the end of the up-wave count cycle which is currently identified as reversal ‘Wave-B’. )

    Commodities:

    GOLD

    (This market currently favors the bears; but since the price is sitting at support at the up trendline it would be prudent to wait to enter a short-term short position until the price moves back up to resistance around the down trendline.)

    CRUDE OIL

    (This is still a range bound market, and the bears still have a slight advantage. The Triple Trender is bearish as well as the Radar3 Trend Strength Index and the Radar1 Fear/Greed indicators. If this market grinds close to $90 it may be worth establishing a short-term short position again. )

    Forex:

    USDCAD

    (We see a nice bullish Pullback Divergence accompanied by a Pullback 23. Note how the Bear Flag Target was just achieved.)

    May the trend be with you,

    Hawk

    www.janarps.com

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Watching and Waiting

    Watching and Waiting

    Last week’s analysis turned out pretty well.  The NASDAQ  index dropped as the bearish Pullback 23 which we pointed out last week indicated it probably would. Gold had a nice downward move as was predicted in last weeks analysis, and the Crude Oil chart provided a nice short fade-trade from the range high. We also saw the EURUSD test the down trendline, which we publicly anticipated here last week, and this enabled us to fulfill our target on that long position.

    This week there are fewer clear trading signals than last. As the ‘Fiscal Cliff” looms closer, most of the markets I am watching appear to be moving sideways in a relatively low volume holding pattern. They appear to be waiting for the American politicians to find a compromise which will address a way to pay off the federal debt which has been accumulating since President Clinton left office with a balanced budget at the turn of the Millennium. It’s interesting to note that the tax policies of the United States have not been able to generate enough revenue to balance the budget since tax cuts were passed in 2001. And then the economic crash of 2008 obviously exacerbated the problem. Consequently, the United States Treasury has had to sell even more promissory notes recently, mostly to Chinese buyers,  and thereby our national debt and the threat of inflation have been accumulating even more rapidly. Now the markets are waiting to see if a few well funded legislators are willing to send the world over the cliff rather than solve the problem.  I doubt the answer will come this week.

    As the markets are waiting, I want to show you how I am looking at a few of my favorite charts. On the examples below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    NASDAQ

    (The trend orientation signals on this market are conflicting. While Radar3 Trend Strength still indicates that this market is in a bearish trend, we also see a nice pullback into the short-term Trender of a bullishly synchronized Triple Trender.  As long as the Radar 2 Price Leader is still moving downward and Radar 3 Trend Strength is still bearish I will maintain my bearish bias. However, if the Radar3 Trend Strength indicator crosses above the zero line I will reassess my analysis.)

    Equities Setups:

    (Buy) HCP- HCP Inc.

    (Notice how at the beginning of December the Radar3 Trend Strength indication crossed  below zero while remaining blue. Now those blue Radar 3 histogram bars are shrinking back up toward zero again and the Radar 1 Fear/Greed and Radar 2 Price Leader indicators are bullish… This is a bullish setup.  Also note that the Triple Trender has recently identified a pullback into the short-term Trender after all three Trenders turned bullish.)

    Commodities:

    GOLD

    (No clear trading signals here, but the bears still have control as indicated by the Triple Trender, the Radar3 Trend Strength, and Radar1 Fear/Greed. Don’t sell short until the Radar2 fast line crosses back under the Radar2 slow line.)

    CRUDE OIL

    (This is still a range bound market, but the bears have a slight advantage. Triple Trender is bearish as well as the Radar3 Trend Strength Index. I have set the Radar1 Fear/Greed alert line at the bearish equivilant of the most recent bullish peak (-9.5). If Radar1 Fear/Greed closes significantly below that level then I will no longer consider buying the low end of this range.)

    Forex:

    EURUSD

    (As predicted last week this market went up to test the down trendline and was rejected. Now we look for a test of the up trendline which may create a bullish pullback opportunity… we’ll see when we get there. Radar 3 Trend Strength looks more bearish than bullish.)

    May the trend be with you,

    Hawk

    www.janarps.com

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • The Secret is Out

    Hawk’s Scan Sentry Report December 3

    This week I want to share a secret with you, but you have to promise not to tell anyone else. I’m sharing this with you because you are one of our valued readers of this blog, and as such we are like family. So let’s keep this in the family. For your eyes only I will describe precisely how one of our best proprietary signals is generated.

    You might have noticed on the charts I present each week a signal dot with “PB23” text above or below the dot. This is what we call a Pullback 23 and it identifies a pullback in a trend. It is generated by a confluence of conditions from two of our best proprietary indicators … the Radar2 Price Leader and the Radar3 Trend Strength Index. Combining the names of Radar2 and Radar3 we get 23, and the fact that it identifies a pullback in a trend gives it its name ‘Pullback 23’.  Here’s how it works. Shhhh…….

    First we want to identify the orientation and strength of the trend. For this we use the Radar3 Trend Strength indicator which plots a histogram up or down identifying the strength and direction of the trend. The histogram is colored blue and pointing up when the market is trending upward, and it is pink and pointing down when the market is trending downward. However, if the color of the Radar3 indicator does not match the up/down orientation of the histogram this identifies trend weakness which could be a pullback in the trend. For example if the histogram is pointing down but the bars are blue, or the histogram is pointing up and the bars are pink this signals weakness in the trend which could identify a pullback opportunity.  Once the Radar 3 Trend Strength indicator has identified a pullback possibility, we look for price acceleration back in the direction of the predominant trend. For this we turn to the Radar2 Price Leader Acceleration Oscillator. This two line oscillator monitors the acceleration and deceleration of the price movement and thereby provides the quickest possible indication of impending changes in price direction. For a bullish pullback we are looking for an acceleration signal which is generated when the fast line crosses over the slow line. A bearish or decelerating signal is generated when the fast line crosses under the slow line. Once Radar3 identifies weakness in the trend and Radar2 identifies acceleration or deceleration back in the direction of the trend, that is when the Pullback 23 signal dot is generated. The chart below shows you how this works….

    I want to show you how I am looking at a few of my favorite markets this week. On the charts below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    NASDAQ

    (I am seeing a bearish Trend Exhaustion 1 and Pullback 23. Although the Triple Trender has just turned bullish, Radar3 Trend Strength does not yet confirm this shift in trend orientation. If Radar3 Trend Strength crosses above the zero centerline then exit this trade.)

    Equities Setups:

    (Sell Short!) MRK- Merck & Co.

    (A bearish pullback 23, Radar2 Price Leader also forms a bearish Pullback Divergence. Stop-loss is a close across the long-term Trender @$45.46)

    Commodities:

    GOLD

    (The technical indications of this market show that, for the next week, the downside is still stronger than the upside. Note the Triple Trender is more bearish than bullish, as is the Radar3 Trend Strength Index. The Radar2 Price Leader also shows price still decelerating. Note the recent bearish Trender Pullback signal.)

    CRUDE OIL

    (This is still a range bound market in an overall downtrend.  Until we break out of this range, the only trade opportunities I see are short term trades which fade the extremes of this range).

    Forex:

    EURUSD

    (As noted last week this market is more bullish than bearish. I still expect to see this one grind upwards at least until it meets resistance at the down trendline.)

    May the trend be with you,

    Hawk

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.

  • Turn up the Volume!

    Hawk’s Scan Sentry Report November 26

    Today I want to talk about trading and holidays. This past week we celebrated Thanksgiving in the US. Even though many of the markets were open most of the week, for many American traders this was a week to focus on gratitude for the other parts of our lives. One would expect to see very light volume on a week like this and we did. For example, in the S&P futures contract the average weekly volume is 8.6 million contracts/week, but last week it was only 5.25 million contracts. Although some traders prefer to trade the index contracts on lighter volume because the price moves are generally less volatile, I did not participate last week. Like many, I was with family enjoying other aspects of life while I can. For me, trading is a means to an end, not an end in and of itself. I trade to manifest riches, but my life is enriched by my relationships with family and friends.  For those relationships I am grateful.

    But now we are in the final month of the year and I expect to see the markets turn up the volume for the next couple of weeks; and I plan to be participating through the last waves of 2012. I want to show you how I am looking at a few of my favorite markets this week. As predicted in last week’s blog, the US indexes rose through the holidays on light volume, and most are currently pressing against resistance levels. They have moved pretty far pretty fast so I expect to see stronger sellers than buyers to start off this week. On the charts below I explain my analysis for several of the most commonly traded markets using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    NASDAQ

    ( This leading index has moved up from last Friday’s lows to the next significant resistance level at 2636 and trendline resistance as well. The  Radar 2 Price Leader is overbought, the Radar3 Trend Strength Index is still bearish, and Radar1 Fear/Greed has formed a bearish pullback divergence so I would expect to see this  up-move slow down or reverse early this week.)

    Equities Setups:

    WYNN- Wynn Resorts

    (A bullish pullback from the up trendline preceded by a bullish Trend Exhaustion 1 and Pullback 23. Next target $115.00 )

    Commodities:

    GOLD

    (Since the price has broken above the high of the Bear Flag consolidation, the Bear Flag breakdown of November 2nd has been negated .We have since closed above the down trendline and are one Trender away from a synchronized bullish Triple Trender. Radar1 Fear/Greed is beginning to indicate that the buyers are regaining the upper hand. I am looking for bullish confirmation in the Radar3 Trend Strength indicator.)

    CRUDE OIL

    (This is still a sideways market , dangerous to trade without a clear trading signal. Radar1 indicates that buyers are beginning to step up.  The current range is $89.50 and $84.70).

    Forex:

    EURUSD

    (We got our bullish confirmation early last week when the Radar2 Price Leader crossed the zero line. Now all three of the Triple Trenders are bullish along with the Radar 3 Trend Strength and Radar1 Fear/Greed. I expect this upward move to continue at least until we see a test of  the down trendline around $1.3100 .)

    May the trend be with you,

    Hawk

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment adviser or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.
  • Follow the Leader

    Hawk’s Scan Sentry Report November 19

    Last week I introduced the new format to "Hawk's Scan Sentry Report" and have already gotten several positive responses from regular readers. Thanks for the feedback.

    As many of you know, I like to compare indexes and their derivatives to see if one is leading the other and thereby observe which has a better chance of moving in which direction. We all know that all of the American equities markets have been dropping since mid October.  The next significant support level for all of the major American indexes is the lows established and tested last May and early June. This week I note an interesting phenomena… the NASDAQ and Dow are already very close to that level of support whereas the S&P still needs to drop 3-4% to reach that mark. It is likely that the NASDAQ futures contract will test those early summer lows and run through whatever stop-loss orders may be resting there. If the NQ tests those lows in the next few days and then we see a rally, I would expect the ES to follow the rally without testing that support level .  One likely scenario is that that some of the indexes will test those early summer lows, then bounce (perhaps toward the end of the year for a nominal ‘Santa Clause Rally’). Normally I would look for a subsequent retest of those lows to follow, but a lot is riding on the markets perception of the American legislators' ability to avoid the ‘Fiscal Cliff’.   If they succeed then it’s likely that the buyers will once again become more numerous than the sellers and prices will rise without retesting that support level. If a compromise is not reached and austerity measures are enacted, then we can expect to see the markets continue drop due to low demand from American consumers.

    On the charts below I explain my analysis using some of the most highly regarded technical indicators available. These are used by both institutional and private traders across the globe and are built into many of today’s most popular trading platforms. However, if you are not familiar with these indicators please follow this link to a legend describing these tools.

    The Charts and Analysis

    Index Futures:

    S & P

    ( All of our indicators are currently quite bearish for the S&P. Historical  indications show the NQ contract leading the ES contract on this move down so I will watch how the NQ contract responds to its early summer lows. Next support levels for the ES contract are 1315 and 1285, resistance around 1390. )

    NASDAQ

    (We are close to the early June lows which coincide with a Bear Flag target at $2426.75. We also see a bullish  oversold Trend Exhaustion1 and a bullish Trend Exhaustion 3 signal. I expect a test of support at 2444 and if Radar1 Fear/Greed does not cross below its previous threshold  of -172 that will create a bullish pivot divergence and good upside potential. )

    Equities Setups:

    C- Citigroup Inc.

    (A bullish Pullback 23 ,and Trend Exhaustion 1, and Trender Pullback at support created by a previous high. A stop-loss should be placed relatively close to this bullish signal. )

    Commodities:

    GOLD

    (Last week I suggested we look for a bearish Pullback 23 which we got.  Now I see that that created  a  bearish ‘Pullback Divergence’ in Radar 2 . I would expect to see gold continue to the downside at least as far as the up-trendline. )

    CRUDE OIL

    (Little has changed in this market over the past week. We are still in a downtrend, resting at a trendline support level looking to achieve a Bear Flag target. Since  Radar1 Fear/Greed is not yet showing us signs that the buyers are stepping up, the path of least resistance is still down).

    Forex:

    EURUSD

    (A bullish Pullback 123 creating a Pullback or “Trend” divergence at support which is going against a bearish Triple Trender. Since this is a bullish setup in a bearish trend  I would like to see the Radar2 Price Leader move above the zero line into acceleration for bullish confirmation. )

    May the trend be with you,

    Hawk

    Jan Arps’ Traders’ Toolbox is not an investment advisory service nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. Examples presented on this site are for educational purposes only.  It should not be assumed that the methods, techniques, or indicators presented in these examples will be profitable or that they will not result in losses. There is a high degree of risk in trading.  Readers using this information are solely responsible for their actions and trade at their own risk. Readers should always check with their licensed financial advisor and their tax advisor to determine the suitability of any investment.

Items 31 to 40 of 125 total

Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Full Risk Disclosure

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